New report publishes urgent recommendations to raise public sector productivity

A report from the Productivity Institute, a UK-wide research organisation based at Alliance Manchester Business School, outlines urgent recommendations to raise public sector productivity, as a critical driver for economic growth in the UK. The report highlights how the public sector must kickstart productivity to deliver a lifeline for the UK economy, through focusing on outcomes and identifying bottlenecks for improvement.

Public sector productivity holds a vital key to reversing the UK’s worsening economic outlook, yet there are concerns it has limited scope to perform that role in the light of budget pressures which would harm the quality of services in the longer term.

The warning from Bart van Ark, professor of productivity studies at Alliance Manchester Business School and managing director of The Productivity Institute, comes amid fears that some organisations may have reached their limits to improve productivity through budget efficiency gains and budget cuts.

The report, Making Public Sector Productivity Practical, outlines urgent recommendations for policy makers and public sector managers by focusing its endeavours to raise productivity on outcomes and identifying the key bottlenecks for improvement. It also notes that an important part of improving public sector productivity is improving service quality, which can occur along the entire delivery chain.

The public sector accounts for about a fifth of UK GDP, so any improvements to its productivity levels significantly impacts the society more widely by improving the quality of services for everyone, and by providing more effective foundations for private enterprise and economy-wide productivity growth. These outcomes will ultimately help to reduce tax burdens and support fiscal responsibility.

The report finds there is untapped potential for improving productivity measurement and performance by better allocating resources.

For example, a more agile workforce – one that is outcome driven, open to new technology and flexible to change – tends to generate greater employee satisfaction and higher morale.

Frontline workers – such as those in healthcare, social care or education – usually have the most knowledge about service delivery processes and should be involved in the design and implementation of an adaptive business design.

Professor van Ark said: “The public sector should not be regarded as a burden on economy-wide growth. Its services should contribute to the creation of jobs and higher wages by improving the conditions for private businesses to invest in skills, innovation, and infrastructure.

 “While tighter spending controls have helped to improve productivity across the sector in the last decade, there is a real concern that these types of gains are unsustainable without broader intervention to improve service delivery. We must support public sector organisations in creating robust strategies to boost output and quality, to identify bottlenecks, implement real-time measurement and cultivate a culture of continuous innovation and collaboration.

 “To do so, the Government must prioritise providing public sector organisations with flexible multi-year budgets and devolved decision-making, while shoring up long-term funding stability. Only then can we facilitate real change.”

To view the complete report click here: